Walgreens Closing 76 Stores
Competitive channel leader still expects net increase in store count in fiscal 2014
DEERFIELD, Ill. -- Walgreen Co., in announcing earnings and sales results for the second quarter and first half of fiscal year 2014 ended Feb. 28, 2014, said that as part of its efforts to optimize the company's asset base, it plans to close 76 drugstores during the second half of fiscal 2014.
During the company's earnings call, president and CEO Greg Wasson said the stores, "spread across the country," would be closed "between now and August."
"We looked at several factors in deciding which stores to close," he said. "We address the impact of increased density from our own stores, the impact of real-estate positioning within the market and material changes to a store’s trade area. In total, this represents a very small portion less than 1% of our 8,200-plus store base. As we position for future growth and markets and communities continue to change, we want to optimize our store footprint and make sure our stores remain on the best corners in America."
He added, "Because most of these stores are located near another Walgreens, we will be reassigning a majority of our team members."
Including these store closures, Walgreens still expects a net increase in its store count in fiscal 2014 of approximately 55 to 75 locations. As of Feb. 28, Walgreens operated 8,681 locations in all 50 states, the District of Columbia, Puerto Rico, Guam and the U.S. Virgin Islands. The company has 8,210 drugstores nationwide, 138 more than a year ago.
Deerfield, Ill.-based Walgreens also operates worksite health and wellness centers, infusion and respiratory services facilities, specialty pharmacies and mail service facilities. Its Take Care Health Systems subsidiary manages more than 700 in-store convenient care clinics and worksite health and wellness centers.
Net earnings for the fiscal 2014 second quarter were $754 million, compared with $756 million in the year-ago quarter.
Net earnings for the first half of fiscal 2014 ended Feb. 28 were $1.45 billion, compared with $1.17 billion in the first half of fiscal 2013.
Second-quarter sales increased 5.1% from the prior-year quarter to a record $19.6 billion, while first half sales increased 5.5% to $37.9 billion. Front-end comparable-store sales (those open at least a year) increased 2% in the second quarter, customer traffic decreased 1.4% and basket size increased 3.4%, while total sales increased 4.3%.
The company is leveraging insights from its Balance Rewards loyalty program to provide customers with more value and simplified promotions. Balance Rewards reached a milestone in February with more than 100 million enrollees and nearly 80 million active members at the end of this year's second quarter.